Litigation Release No. 22459/August 27, 2012

The Securities and Exchange Commission announced today that the United States District Court for the District of Utah entered a final judgment against Jeffrey L. Mowen, ordering Mowen to disgorge $8,041,779 in ill-gotten gains and $1,964,203.67 in prejudgment interest. The Court also ordered Mowen to pay a civil penalty of $8,041,779, for a total of $18,047,761.67. The Court further enjoined Mowen from future violations of Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933.

The SEC Complaint alleged that Mowen operated a Ponzi scheme that was fed through investor funds raised by another defendant, Thomas Fry. Fry, in turn, raised funds through other defendants, Fry’s promoters, via the unregistered offer and sale of high-yield promissory notes. According to the Complaint, the scheme raised over $40 million from over 150 investors in several states, over $18 million of which was funneled to Mowen. Mowen never invested the funds, instead misappropriating over $8 million to support a lavish lifestyle.

On May 4, 2011, Mowen pled guilty to committing wire fraud in a related criminal action and is currently serving a ten year prison sentence. United States of America v. Mowen, Case No. 2:09-cr-00098-DB (D. Utah).

A final judgment ordering disgorgement and penalties against Fry and several of his promoters was entered on June 15, 2012.